Law and environmental-technological change

Construction crane at Norris Dam (TVA) (Currents of Change)

Yesterday's New York Times had a piece by Naomi Oreskes and Erik Conway on the need for government help in making the technological transformations necessary to avert disastrous climate change - in particular, phasing out fossil fuels by the year 2050. They write:

None of the major technological transformations of the 19th and 20th centuries were the product of the private sector acting alone and responding only to the market. Railroads, radio, telegraph, telephone, electricity and the internet were all the result of public-private partnerships. None was delivered by the “invisible hand” of the marketplace. All involved significant interventions by the visible hand of government.

What does this mean for us? Right now, government is widely seen as inefficient and ineffective, and our needs are thought to be best addressed by the private sector, through entrepreneurship, venture capital and Silicon Valley-style “disruption.” But unless we acknowledge the need for a substantial government role, we are going to be stuck, because change driven solely by the marketplace is unlikely to suffice.

Some might object that our current challenge is vastly different from those met by past technological changes, because we’re not just talking about a thing, like a radio or cellphone, but about changing our entire energy system. But these earlier transformations involved systems, too. Just as energy technology isn’t one thing, neither were the railroads, radio, electricity or the internet. Those systems all involved many parts, including federal, state and local policies to support them (the land grants that made the railroads possible, for instance, or role of the Federal Trade Commission in licensing radio and television stations). 

What makes large-scale technological change challenging is the integration of all of those parts. Electricity wasn’t just a matter of turbines, or even turbines, power lines and transformers. Financing and regulation were also required. After electricity was introduced to the urban marketplace, the biggest obstacle to its expanded use was profitability. The private sector was able to make money bringing electricity to densely populated cities like New York, St. Louis and Chicago, but it took federal intervention, under the 1936 Rural Electrification Act, to bring it to rural communities across America.

And even then, uptake was not immediate. Rural electrification boosters insisted that hard-working farmers urgently needed electricity, but initial demand was less than expected. The Tennessee Valley Authority wanted to cut rates to drive up demand. But private utilities opposed this, worrying that low rates would threaten their financing, and the T.V.A. settled on an appliance subsidy to drive increased household consumption. Demand had to be built.

Law was obviously a major part of these historical transformations, and there are other systems, more obviously environmental, that Oreskes and Conway could have mentioned -- such as urban water and sewage systems, and the system of transportation by automobile.